**Exhibit      99.1**

**Harbin        Electric Announces First Quarter 2007 Financial Results**

***1Q07        Revenues Increase 54% to $13.6 Million, Diluted EPS of        $0.19***

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**About        Harbin Electric, Inc. **

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| **HARBIN                      ELECTRIC, INC. AND SUBSIDIARIES**     |   |
|---------------------------------------------------------------------|--------|
|                                                                |   |
| **CONSOLIDATED                      BALANCE SHEETS**                |   |
| **AS                      OF MARCH 31, 2007 AND DECEMBER 31, 2006** |   |
|                                                                |   |

|                                                                                                                      |   |                           |       |                              |   |
|----------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|------------|-----------------------------------|--------|
|                                                                                                                 |   | March                      31, |       | December                      31, |   |
|                                                                                                                 |   | 2007                           |       | 2006                              |   |
|                                                                                                                 |   | UNAUDITED                      |       |                              |   |
| ASSETS                                                                                                               |   |                           |       |                              |   |
| CURRENT                      ASSETS:                                                                                 |   |                           |       |                              |   |
| Cash                                                                                                                 |   | $                              | 56,967,862 |                              | $      | 67,313,919 |   |
| Accounts                      receivable, net of allowance for doubtful accounts of                      $45,004     |   |                           |       |                              |   |   |   |
| and                      $44,552 as of March 31, 2007 and December 31, 2006,                      respectively  |   |                           | 9,389,005  |                              |   | 8,827,799 |   |
| Inventories                                                                                                          |   |                           | 887,522    |                              |   | 583,287 |   |
| Other                      receivables                                                                               |   |                           | 191,393    |                              |   | 27,991 |   |
| Other                      receivables - related parties                                                             |   |                           | 51,800     |                              |   | 44,998 |   |
| Advances                      on inventory purchases                                                                 |   |                           | 1,537,630  |                              |   | 834,590 |   |
| Total                      current assets                                                                       |   |                           | 69,025,212 |                              |   | 77,632,584 |   |
|                                                                                                                 |   |                           |       |                              |   |   |   |
| PLANT                      AND EQUIPMENT, net                                                                        |   |                           | 9,494,133  |                              |   | 9,219,534 |   |
|                                                                                                                 |   |                           |       |                              |   |   |   |
| OTHER                      ASSETS:                                                                                   |   |                           |       |                              |   |   |   |
| Debt                      issue costs, net of amortization                                                           |   |                           | 2,634,046  |                              |   | 2,757,155 |   |
| Advances                      on equipment purchases                                                                 |   |                           | 12,522,108 |                              |   | - |   |
| Advance                      on intangible assets                                                                    |   |                           | 2,266,597  |                              |   | 2,585,977 |   |
| Intangible                      assets, net of accumulated amortization                                              |   |                           | 836,546    |                              |   | 640,337 |   |
| Other                      assets                                                                                    |   |                           | 272,628    |                              |   | 123,234 |   |
| Total                      other assets                                                                         |   |                           | 18,531,925 |                              |   | 6,106,703 |   |
|                                                                                                                 |   |                           |       |                              |   |   |   |
|  Total                      assets                                                                              |   | $                              | 97,051,270 |                              | $      | 92,958,821 |   |
|                                                                                                                 |   |                           |       |                              |   |   |   |
| LIABILITIES                      AND SHAREHOLDERS' EQUITY                                                            |   |                           |       |                              |   |   |   |
|                                                                                                                 |   |                           |       |                              |   |   |   |
| CURRENT                      LIABILITIES:                                                                            |   |                           |       |                              |   |   |   |
| Accounts                      payable                                                                                |   | $                              | 171,409    |                              | $      | 258,911 |   |
| Other                      payables                                                                                  |   |                           | 409,587    |                              |   | 406,520 |   |
| Accrued                      liabilities                                                                             |   |                           | 123,289    |                              |   | 107,263 |   |
| Customer                      deposits                                                                               |   |                           | 331,010    |                              |   | 319,261 |   |
| Taxes                      payable                                                                                   |   |                           | 339,830    |                              |   | 556,943 |   |
| Interest                      payable                                                                                |   |                           | -          |                              |   | 1,122,000 |   |
| Total                      current liabilities                                                                  |   |                           | 1,375,125  |                              |   | 2,770,898 |   |
|                                                                                                                 |   |                           |       |                              |   |   |   |
| NOTES                      PAYABLE, net of debt discount $20,277,368 and $21,410,401 as                      of      |   |                           |       |                              |   |   |   |
| March                      31, 2007 and December 31, 2006, respectively                                              |   |                           | 29,722,632 |                              |   | 28,589,599 |   |
|                                                                                                                 |   |                           |       |                              |   |   |   |
| WARRANT                      LIABILITIES                                                                             |   |                           | -          |                              |   | 16,568,080 |   |
|                                                                                                                 |   |                           |       |                              |   |   |   |
|  Total                      liabilities                                                                         |   |                           | 31,097,757 |                              |   | 47,928,577 |   |
|                                                                                                                 |   |                           |       |                              |   |   |   |
| COMMITMENTS                      AND CONTINGENCIES                                                                   |   |                           | -          |                              |   | - |   |
|                                                                                                                 |   |                           |       |                              |   |   |   |
| SHAREHOLDERS'                      EQUITY:                                                                           |   |                           |       |                              |   |   |   |
| Common                      Stock, $0.00001 par value, 100,000,000 shares authorized,                                |   |                           |       |                              |   |   |   |
| 16,600,451                      shares issued and outstanding                                                   |   |                           | 166        |                              |   | 166 |   |
| Paid-in-capital                                                                                                      |   |                           | 35,419,635 |                              |   | 12,252,064 |   |
| Retained                      earnings                                                                               |   |                           | 23,273,438 |                              |   | 26,222,408 |   |
| Statutory                      reserves                                                                              |   |                           | 4,523,715  |                              |   | 4,523,715 |   |
| Accumulated                      other comprehensive income                                                          |   |                           | 2,736,559  |                              |   | 2,031,891 |   |
| Total                      shareholders' equity                                                                 |   |                           | 65,953,513 |                              |   | 45,030,244 |   |
|  Total                      liabilities and shareholders' equity                                                |   | $                              | 97,051,270 |                              | $      | 92,958,821 |   |

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| **HARBIN                      ELECTRIC, INC. AND SUBSIDIARIES**                           | ** ** |
|-------------------------------------------------------------------------------------------|------------|
| ** **                                                                                | ** ** |
| **CONSOLIDATED                      STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME** | ** ** |
| **FOR                      THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006**               | ** ** |
| **(UNAUDITED)**                                                                           |       |

|                                                                            |   | FOR                      THE THREE MONTHS |       |
|---------------------------------------------------------------------------------|--------|-------------------------------------------|------------|
|                                                                            |   | ENDED                      MARCH 31,      |       |
|                                                                            |   | 2007                                      |       | 2006 |   |
| REVENUES                                                                        |   | $                                         | 13,626,214 |   | $ | 8,878,658 |   |
|                                                                            |   |                                      |       |   |   |   |   |
| COST                      OF SALES                                              |   |                                      | 6,768,286  |   |   | 4,604,922 |   |
|                                                                            |   |                                      |       |   |   |   |   |
| GROSS                      PROFIT                                               |   |                                      | 6,857,928  |   |   | 4,273,736 |   |
|                                                                            |   |                                      |       |   |   |   |   |
| RESEARCH                      AND DEVELOPMENT EXPENSE                           |   |                                      | 217,840    |   |   | 322,589 |   |
|                                                                            |   |                                      |       |   |   |   |   |
| SELLING,                      GENERAL AND ADMINISTRATIVE EXPENSES               |   |                                      | 1,514,463  |   |   | 794,176 |   |
|                                                                            |   |                                      |       |   |   |   |   |
| INCOME                      FROM OPERATIONS                                     |   |                                      | 5,125,625  |   |   | 3,156,971 |   |
|                                                                            |   |                                      |       |   |   |   |   |
| Other                      income, net                                          |   |                                      | (2,456     | )  |   | (54,062 | ) |
| Non-operating                      (income)                                     |   |                                      | (6,321     | )  |   | - |   |
| Realized                      (gain) loss on sale of marketable securities |   |                                      | -          |   |   | (571,143 | )  |
| Amortization                      expense of debt discount                      |   |                                      | 1,133,033  |   |   | - |   |
| Interest                      expense (income), net                             |   |                                      | 597,306    |   |   | (12,321 | )  |
| OTHER                      EXPENSE (INCOME), NET                                |   |                                      | 1,721,562  |   |   | (637,526 | )  |
|                                                                            |   |                                      |       |   |   |   |   |
| INCOME                      BEFORE PROVISION FOR INCOME TAXES                   |   |                                      | 3,404,063  |   |   | 3,794,497 |   |
|                                                                            |   |                                      |       |   |   |   |   |
| PROVISION                      FOR INCOME TAXES                                 |   |                                      | -          |   |   | - |   |
|                                                                            |   |                                      |       |   |   |   |   |
| NET                      INCOME                                                 |   |                                      | 3,404,063  |   |   | 3,794,497 |   |
|                                                                            |   |                                      |       |   |   |   |   |
| OTHER                      COMPREHENSIVE INCOME:                                |   |                                      |       |   |   |   |   |
| Unrealized                      loss on marketable securities                   |   |                                      | -          |   |   | 587,171 |   |
| Foreign                      currency translation adjustment                    |   |                                      | 704,668    |   |   | 241,743 |   |
|                                                                            |   |                                      |       |   |   |   |   |
| COMPREHENSIVE                      (LOSS) INCOME                                |   | $                                         | 4,108,731  |   | $ | 3,449,069 |   |
|                                                                            |   |                                      |       |   |   |   |   |
| BASIC                      WEIGHTED AVERAGE NUMBER OF SHARES                    |   |                                      | 16,600,451 |   |   | 16,600,451 |   |
|                                                                            |   |                                      |       |   |   |   |   |
| BASIC                      EARNING PER SHARE                                    |   | $                                         | 0.21       |   | $ | 0.23 |   |
|                                                                            |   |                                      |       |   |   |   |   |
| DILUTED                      WEIGHTED AVERAGE NUMBER OF SHARES                  |   |                                      | 18,016,627 |   |   | 16,700,451 |   |
|                                                                            |   |                                      |       |   |   |   |   |
| DILUTED                      EARNING PER SHARE                                  |   | $                                         | 0.19       |   | $ | 0.23 |   |

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